No liftoff in Lynn

Residents work to revive hope as condo market falls short of expectations

Seth Albaum, a Central Square condo owner, says he anticipated quicker downtown improvement. He has launched a neighborhood association "to build up morale in the neighborhood." (Globe Staff Photo / Joanne Rathe)

John Moore sat on a bar stool and looked out on Oxford Street in Lynn. His restaurant, which served $16 to $20 entrees and stocked fine wines and liquors, had been losing money since it opened 15 months ago and was going out of business.

Moore had hoped that the downtown's new condo residents would be the backbone of his business. He was able to borrow $150,000 in low-interest loans from the nonprofit Economic Development and Industrial Corporation of Lynn, which helps stimulate growth.

But now, he was getting ready to serve his last meal at the Downtown Bistro and Wine Bar. "It was probably a little bit too early to come here," said Moore. "There are just not enough condos to support a casual upscale restaurant here."

Five years after the city changed its zoning laws to allow condos to be built in former factories and industrial buildings, sales and new construction have come to a near halt. While more than 200 condos and high-end apartments have been sold or rented, plans by companies to build 300 more condos - which would meet the city's goal of 500 downtown - have been put on hold.

Mayor Edward J. Clancy Jr. says Lynn's condo slowdown reflects a national trend in real estate. "The housing collapse has definitely had a deleterious affect on the downtown," he said.

Lynn, which had 291 foreclosures this year, is not the only city in the area that has seen condo prices fall. During the first six months of 2008, condo foreclosures tripled in large Massachusetts cities north of Boston, according to The Warren Group of Boston, which tracks real estate sales. In July, Lynn had the fourth-highest number of foreclosure deeds in the state, with 46.

Clancy also thinks the city has had trouble shaking its "City of Sin" moniker, a perception that he says has contributed to its economic slowdown. "The city of Lynn, and the downtown - in particular - have image problems," he said.

Clancy said investing in the downtown and using EDIC funds to help jump-start businesses is the best way to shake that image. He pointed to the city's $20 million downtown police station, and the $10 million project to build a new headquarters for Girls Inc. of Lynn. He also said more police than ever are patrolling the downtown, leading to a reduction in crime. According to the FBI, violent crime in Lynn decreased from 2005 to 2006, the last two consecutive years for which official statistics were available.

While crime may be down, no one can dispute the empty blocks downtown. The streets and many of the buildings look eerily similar to how they looked 20 years ago. Instead of creating niche business districts mirroring other gentrified strongholds such as Boston's Jamaica Plain and Somerville's Davis Square, storefronts sit empty alongside vacant lots - which total 12 acres in the downtown's 100-acre area

While officials like Clancy say people have to be patient with the downtown's growth, condo owners have banded together to create a neighborhood association, and want the city to outline its vision of the downtown's future.

"I think people expected things to happen faster," said Seth Albaum, who like many of his neighbors grew up out of state and bought a condo in Lynn because it was cheaper than Boston condos, just a few steps away from the commuter rail, and close to the beach.

"I felt like it was part of something growing," said Albaum, a Chelsea High teacher who formerly lived in Boston. In Lynn's Central Square, buildings empty for decades were filling up with commuters. Nearly all were college-educated and had come from out of state, and had never heard Lynn referred to as the "City of Sin."

A year after he bought a condo that overlooks Central Square, Albaum decided to form the Downtown Lynn Neighborhood Association. He said the city needs a marketing plan, and that condo owners are eager to help promote the city. "We need to build up morale in the neighborhood. The people here have to make the scene and to sell the neighborhood, because that's what businesses are looking for," he said.

EDIC executive director James Cowdell understands residents' concerns, and said his nonprofit agency plans to spend $50,000 over the next year to help market the downtown to help sell condos and fill empty storefronts. "We haven't had a marketing plan for 15 years for the city of Lynn," said Cowdell, whose organization will offer up to $200,000 in low-interest loans to businesses that would relocate to Lynn.

Clancy, a former state senator who has served as mayor for almost six years, said he wants to see niche businesses downtown, but he doesn't believe spending money to market the city will bring new businesses. "I'm a believer much more in trying to finance and support business than having a billboard that nobody's looking at in Cambridge," he said.

Ed O'Donnell, a vice president for the Mayo Group - which has invested $12 million to build new condos and apartments downtown - also believes that once the real estate market recovers, the downtown will see more businesses. His company plans to spend another $8 million next year to build 32 new condos in Central Square, and he said once the downtown reaches 500 condos, or "critical mass," retailers will come.

While there are several downtown lofts on the market now - ranging from $160,000 to $319,000 - local real estate agents, such as George Meimeteas of Coldwell Banker Signature Homes said Lynn's foreclosures have slowed sales. "The condo market has gone really flat," said Meimeteas, who thinks the market will begin to rebound once the foreclosures are sold.

But until the market rebounds, residents say they'll be working on their own plans to make the neighborhood more vibrant. On a recent night, more than 20 gathered in Tatiana's - one of the few restaurants downtown - to trade ideas for the new neighborhood association.

The group, composed of residents mostly in their 30s and 40s, sat at a long table and resembled a group of corporate staffers taking on new assignments. They took notes about empty storefronts and discussed supporting existing businesses as they checked their e-mail and text messages. The group agreed to invite city officials such as Clancy to their next city community meeting on Oct. 2 to begin a dialogue.

"We are the market," said Lesley Livingstone, a downtown condo owner. "We need to engage with the city."

Meanwhile, some residents and business owners who were part of the first condo wave four years ago have decided to leave.

Sean Lobdell, a marketing executive who bought a Lynn condo four years ago, said he expects to move when the market rebounds. "When I moved here four years ago I never saw anything like this kind of potential for momentum," said Lobdell.

"But there's been no planning, no marketing, no incentive. This city needs to roll out a package to make people want to pick up and do what I did years ago - move to Lynn."

Steven Rosenberg can be reached at srosenberg@globe.com.